Explaining RBIs tilt

Updated: Jan 30 2008, 04:15am hrs
Reserve Bank of India Governor YV Reddy has disappointed many investors and businessmen by leaving key rates unchanged. There was a near consensus among commentators that the Indian economy is due for a policy of monetary easing. The decision scale, however, seems to have new weights attached to itmeasures of potential voter enthusiasm and disaffection on account of faster growth and higher inflation, respectively. This explains the tilt. But businesses should not complain. The real cost of capital is still favourably low.

Rishabh Agarwal New Delhi

Dashed hope

As your editorial argued (Just do it, doc, Jan 28), the time was ripe for RBI to go for an interest rate cut. The hope that Governor YV Reddy would oblige, while announcing the credit policy, is all but dashed. For increasing exports, it is not advisable to hold the rupee artificially down. Moreover, additional capital controls are also not beneficial. An interest rate cut, given the present economic imperative to reduce interest arbitrage opportunities, would have led to a win-win situation for India.

RN Lakhotia New Delhi

Twin slur

The exoneration of Harbhajan from racial abuse proves that arrogance and perjury go together. Clearly, Australian players who in writing accused Harbhajan of calling Symonds a monkey are liars.

Sudhir K Bhave